Written: November 11, 2017

National retailer claims top Atlanta broker ran massive fraud scheme

A lawsuit by the nation’s largest specialty bedding retailer claims a top Atlanta commercial real estate broker stuffed his mattress in a long-running fraud and bribery scheme.

Houston, Texas-based Mattress Firm Holding Corp. alleges prominent retail dealmaker Alexander Deitch was at the center of a “massive, multi-year fraud, bribery, and kickback scheme involving the senior management of a national retailing company.”

Mattress Firm is the nation’s top specialty bedding retailer with more than 3,400 company-operated and franchised stores across the country. At the time of the alleged scheme, Deitch was a senior vice president and principal at Colliers International Atlanta, one of the city’s largest commercial real estate brokerages. This year, Deitch was named No. 4 retail producer by the Atlanta Commercial Board of Realtors and is a lifetime member of its Million Dollar Club.

Deitch is no longer employed by Colliers.

The lawsuit filed Oct. 30 in the District Court of Harris County, Texas, claims Deitch worked alongside top Mattress Firm real estate executives Bruce Levyand Ryan Vinson (among the 17 defendants named in the case) to defraud the retailer out of potentially millions of dollars.

“Mr. Deitch denies the allegations made in the petition filed by Mattress Firm,” his attorney, Kevin Ward with Atlanta-based Schulten Ward Turner & Weiss LLP, said in a statement to Atlanta Business Chronicle. “All of his business dealings were conducted in good faith and in the best interests of Mattress Firm. He intends to defend the lawsuit in court.”

Among the allegations, the 47-page lawsuit claims Deitch inflated rents and elongated lease terms for Mattress Firm stores, thus earning higher commissions. He also allegedly set up shell companies including an entity called Chase Ventures LLC to clandestinely purchase properties that Mattress Firm was to lease, placing him “secretly on the opposite side of the transactions,” says the lawsuit.

Mattress Firm also accuses Deitch of charging bogus developer fees in excess of $50,000 per store. The lawsuit alleges he worked with a preferred group of developers who made “millions of dollars in profits” flipping Mattress Firm stores with above-market rents. Those developers in turn gave kickbacks to Deitch, and Mattress Firm’s Levy and Vinson in the form of “lucrative business opportunities and extravagant gifts,” says the lawsuit, such as free hotel stays, expensive dinners and exotic trips.

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